Avid Technology Inc (AVID) 2007 Q3 法說會逐字稿

Please stand by. We're about to begin.

Good day and welcome, everyone, to the Avid Technology Third Quarter Earnings Results Conference Call.

Today's call is being recorded.

For opening remarks and introductions, I would like to turn the call over to the Director of Investor Relations, Mr. Dean Ridlon. Please go ahead, sir.

Thank you, and good afternoon, everyone. I'm Dean Ridlon, Avid Technology, Inc.'s Investor Relations Director. I'd like to welcome you to today's call.

Before we begin, please note that this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about projected growth of existing or new markets and anticipated results of operations.

There are a number of factors that could cause actual events or results to differ materially from those indicated by such statements, such as competitive factors, including Avid's ability to anticipate customer needs, pricing pressures, our ability to execute our strategic plan, and adverse changes in general economic or market conditions, particularly in the content creation industry.

Other important events and factors appear in Avid's filings with the U.S. Securities and Exchange Commission. In addition, our forward-looking statements represent our estimates only as of today, October 25, 2007, and should not be relied upon as representing our views as of any subsequent date. Avid undertakes no obligation to review or update these forward-looking statements.

During this call we will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. The most directly comparable financial measures calculated in accordance with GAAP and a reconciliation of these GAAP measures to these non-GAAP measures are contained in the press release announcing this quarter's results and available in the Investor's section of our website, www.avid.com.

And now I'd like to introduce Nancy Hawthorne, Avid's Interim CEO.

Thank you, Dean. I'd like to welcome you to our third quarter 2007 results conference call. With me on the call today is Joel Legon, our Chief Financial Officer.

As you can imagine, we have a lot to talk about on this call. I'll start by giving a high-level overview of the quarter and an update on our CEO search, as well as the status of our engagement with [Bain]. Next, Joel will give a detailed review of this quarter's financial results, then I'll come back and give updates on each of our business units. And finally, Joel will provide an update to our financial outlook. We will then be happy to take your questions.

Our third quarter revenue of $227 million was up slightly from the prior quarter, down slightly from the prior year, and within our expectations. Given the changes in our executive ranks and the hard work we're putting in to overhaul some of our operations and processes, we're pleased the stability of revenue across our business units, industry segments and geographies.

Non-GAAP gross margin was increased 70 basis points, improved for the third straight quarter, resulting in an increase in non-GAAP net income to $0.37 per diluted share. Taking our third quarter results as a whole, we're pleased that revenue is stable and margins are improving during this time of transition for our company. These are signs that our customers and business partners continue to see the value of our products and services. Our results are also indicative of our focused efforts to improve Avid's profitability by operating in a more efficient and effective manner across the entire enterprise.

As previously noted, we have engaged Heidrick & Struggles for our CEO search, and are excited about the number and quality of candidates that have expressed interest in this position. The Search Committee of our Board of Directors is working through the interview process now, and I am optimistic that we will have a new CEO hired in the next few months.

In addition to the CEO search, Heidrick & Struggles have also been engaged to perform a retain search for two other executive staff level positions, Chief Technology Officer and Vice President of Human Resources. And we will work through the search process to fill these important positions as expeditiously as possible.

Now, returning to our efforts to improve Avid's profitability, we have collaborated with [Bain] since the end of July to perform a diagnostic review of our company. Through this review, we have identified a number of potential initiatives and confirmed the merit of some initiatives already underway. These initiatives, which we refer to collectively as Avid 2020, signifying our 20 years of history and preparing for the next 20 years, focus on two main areas.

First is operational efficiencies. We want to better leverage the breadth and scale of the entire company in our internal operations and dealings with third parties. Our near-term focus will be on internal infrastructure, where we intend to upgrade our business processes, our analytical tools, and our information systems.

The second area of focus is strategic analysis. We want to improve the way we analyze our various businesses to improve sales and marketing effectiveness, increase our focus on growth areas, and enhance our go-to-market strategy to ensure we are addressing the needs of our customers.

We just finished the diagnostic phase of the Avid 2020 review of our business, and are currently prioritizing and sequencing the initiatives, as well as determining the overall amount of work and investment needed. These investments are both OpEx and CapEx in nature, and are expected to produce good returns, ultimately enhancing Avid's long-term profitability.

While it is not within the scope of this call to outline each initiative, I do want to give you some examples to provide a general sense of the type of project we are undertaking. So, for one example, we are applying a systematic approach to supplier management, developing [c-metrics] and measurement benchmarks to supplier management, and ensuring analytical tools are in place to enable proper spend management.

Another project is to complete the financial shared services effort we discussed with you previously and expand this effort beyond finance. I do want to note that Avid 2020 is a fluid project, which is expected to span the next several years, and it is likely that new initiatives will be identified as we move forward. We are excited about how the implementation will further strengthen Avid and position the company for long-term success.

Joel, would you now please review the third quarter results?

Thank you, Nancy, and good afternoon, everyone.

In summary, we had a solid quarter, with revenues of $226.8 million. GAAP loss before income taxes was $3.1 million, and our GAAP tax provision was $2.8 million, resulting in a net loss of $5.9 million, or $0.14 per share, on 40.8 million average shares outstanding.

Our earnings release provides a table of certain items that are included in our results. These items total $21 million and consist of amortization, stock-based compensation, restructuring costs, other costs and related tax adjustments. The reason these items have been highlighted is that, when we measure the performance of our business units and disclose our business segments results externally, we do not include these items.

Adding the $21 million in charges to our GAAP net loss of $5.9 million results in a non-GAAP net income of $15.2 million for the third quarter. Using fully diluted shares outstanding of $41.2 million, non-GAAP earnings per share was $0.37.

Looking at each business unit, Professional Video had revenue of $118.9 million and an operating margin of 8.4%. Audio revenue was $77.3 million, with an operating margin of 10.1%. And Consumer Revenue was $30.7 million, with an operating margin loss of 6.1%. GAAP gross margins were 48.7%, including $4.1 million of acquisition-related amortization, $2.8 million of restructuring costs, and $430,000 of stock-based compensation. Without these non-cash charges, gross margins would have been 51.9%.

Both Professional Video and Audio gross margins increased sequentially due to favorable product mix and operational efficiencies. Consumer gross margin declined sequentially as a result of product mix, as the PCTV business, which carries lower margins, represented a more significant percentage of Consumer revenue than in the prior quarter.

Non-GAAP operating expenses decreased significantly from the second quarter, reflecting the restructuring initiatives implemented at the beginning of the quarter, as well as reduced trade show spending coming off NAB in Q2. Non-GAAP tax expense was approximately $2.7 million.

Now, let's talk about the operating performance of our three business segments. In addition to interest, we excluded the following items from our business segment results in Q3. $7.5 million of non-cash amortization of intangibles, $4 million of non-cash stock-based compensation, $9.1 million of restructuring charges due to the actions taken in our video and consumer businesses at the beginning of the quarter, and an inventory write-down related to our decision to exit the transmission server business. Nancy will discuss this decision in a few minutes.

$350,000 for other costs, and $74,000 of tax adjustments for the items mentioned above.

As I mentioned, Professional Video revenue was approximately $119, which is consistent with the general range we've seen over the past six quarters, but down 6% from Q3 2006. We continue to convert deals from our backlog, and our run rate business was healthy, helped by strong U.S. government business.

Sequentially, Professional Video operating expenses were down nearly $7 million versus Q2 due to the restructuring actions and lower trade show spending I mentioned earlier. The improved gross margin, coupled with reduced operating expenses, resulted in Professional Video operating profits increasing sequentially by nearly $8 million to $10 million, or 8.4% of revenue. Year-over-year, Video Operating expenses were roughly flat. Professional Video operating profits in Q3 2007 were $4.7 million lower than in Q3 2006 due to the lower year-over-year revenue.

Our backlog remains healthy as we continue to move deals into revenue through a combination of obtaining customer acceptance and solving some of the technical issues that we have been facing.

Here are some additional metrics on our Professional Video backlog, which represents the vast majority of the total company backlog as of the end of Q3. We expect that roughly 35% to be recognized from this backlog by year-end. We have received cash for approximately 35% of our backlog. Approximately $24 million of inventory has been shipped to the deals in our backlog, and roughly 55% of our current backlog has come from 2007 bookings.

Audio revenue in Q3 was up both sequentially and year-over-year. The 4% year-over-year increase includes Sibelius, which was acquired in late July 2006. as a result of higher revenues and gross margin and level operating expenses, Audio operating profits increased sequentially from $6.4 million to $7.8 million, or 10.1% of revenue. Year-over-year, increases in revenue and gross margin were more than offset by an operating expense increase, resulting in a modest decline in Audio operating profits from Q3 2006.

Consumer revenue was up sequentially to $30.7 million, while gross margins were down sequentially and operating expenses were up modestly. As a result, Consumer operating loss increased sequentially to $1.9 million relative to $1 million in Q2. Year-over-year, revenues were roughly flat, but higher gross margins and operating expense reductions resulted in a $700,000 improvement in Consumer's bottom-line results relative to Q3 2006.

So, in total, results for the third quarter of 2007 were revenue of $226.8 million, non-GAAP gross margins of 51.9%, and non-GAAP operating expenses of $101.9 million. Operating profits more than doubled sequentially to $15.9 million, or 7% of revenue. Year-over-year, the decrease in revenue, coupled with increased operating expenses, resulted in a decline in non-GAAP operating profit of $4.6 million from Q3 2006.

Turning to the balance sheet, cash increased by $37.2 million to $197.2 million at September 30 from $160 million at June 30, due primarily to operating cash flow. Inventory was down approximately $6.6 million from the June 30 balance as each of our businesses continues to monitor inventory very carefully. We are on track to attain our goal of reducing inventory levels by $20 million from the 2006 ending balance by the end of 2007. DSOs were relatively steady at 56 days.

I'd now like to hand things back to Nancy for a discussion of the operations in each of our businesses. Nancy?

Thanks, Joel. I'll now provide some additional detail on what's going on in our market segments, and then it'll be back to Joel to provide guidance, and then we'll open it up for questions.

So, first, our Professional Video business unit, we believe that the key to improving performance in this market segment is to offer complete solutions to larger media enterprises, to make our core editing products easier to integrate into existing installations, and better address the independent creative marketplace.

We are already seeing progress in our editing product line, which rebounded somewhat in Q3, with revenue up sequentially, led by both revenue and unit gains in our flagship Media Composer line. The initiative to improve the integration and reliability of our solutions is still underway, and, during the quarter, we shipped an improved Quality release to which our customers have responded positively.

Turning to our Broadcast segment, the Storage and Infrastructure line was down year-over-year but up sequentially. We continued to invest in the development of our Interplay product line, which enables enterprise-wide digital asset management. Enterprise sales, which tend to be influenced by big enterprise deals, were down sequentially due to deal timing, but up significantly year-over-year, so we're pleased with the overall trend. Our Sundance digital unit, which also sells broadcast infrastructure products in the form of Broadcast Automation software, had their fourth consecutive quarter of increasing revenue.

One important change worth noting is that we have decided to exit the Transmission Server business. We believe that we are best suited to help our customers serve their workflow challenges by delivering high quality production hardware, software and automation systems which integrate with the transmission server offerings that are currently available from third parties. This decision affects only one product line, where we canceled the development of the next-generation Media Stream Server. Avid will continue to support Media Stream customers after the product has been discontinued, with details to follow. It's important to note that our other server lines are unaffected by this decision.

Turning now to Audio. In the third quarter, revenue was up 4.2% from Q3 '06 when including Sibelius, which we acquired in late July of 2006. In the high-end Pro market segment, as expected, our Pro Tools HD hardware upgrade business was down from last year. This was partially offset by relatively level -- I'm sorry -- relatively level Pro Tools HD Core and Bundle sales, along with continued strong performance from the HD based ICON console and VENUE Live Sound mixing systems. VENUE continues to gain recognition and share in the Live Sound market segment, and has become the choice of many major touring artists. D-Show Profile, the newest VENUE family member, is selling well.

On the Volume side of our business, our Pro Tools LE and M-Audio Pro Tools M Powered revenue grew 12% year-over-year, reflecting the ongoing growth in the home hobbyist studio market. M-Audio had a more challenging quarter overall, with their business down year-over-year. As discussed last quarter, the drop is due to the decline in M-Audio's audio interface and related software revenue in the Musical Instrument channel, attributable to increased competition as well as delayed M-Audio product releases. These declines were partially offset by growth in Keyboard and Speaker sales.

Sibelius had good results, with a full quarter of sales of the latest version of their flagship product, Sibelius 5 software. Our overall strategy in Audio continues to build upon our brand recognition in integrated systems for digital audio production. To this end, we offer a wide range of products, capabilities and price points, along with a third-party ecosystem built around our flagship Pro Tools software.

In addition, we are focusing more on entry-level customers in Education, with Sibelius, Pro Tools and M-Audio products, and growing our Live Sound market offerings.

Our Consumer strategy has been to build upon our flagship Pinnacle Studio Consumer Video Editing system while branching into video-centric digital lifestyle offerings like PC-based TV viewing, recording and place shifting. Studio 11, which we launched in May, has already achieved number one market share both in the U.S. and in Europe, which is particularly gratifying after the quality issues with version 10 and our subsequent hard work to make Studio 11 a very compelling and high quality release.

Our Home Video Editing segment, which includes hardware and software products beyond Studio 11, was up year-over-year but down from the product launch quarter in Q2, as higher revenues in the U.S. were offset by some normal seasonal softness in Europe. Our PCTV business was stronger in both revenue and growth margins, posting a significant sequential gain coming off an unusually weak Q2, led by very strong sales in the Americas.

So, to wrap things up, I'd like to ask Joel to discuss our outlook. Joel?

Thank you, Nancy.

For the fourth quarter, we expect revenue to be between $245 million and $255 million, and GAAP earnings between -- GAAP earnings per diluted share to be in the range of $0.20 to $0.33. Excluding $7 million of amortization, $4 million of stock-based compensation, $1 million of restructuring and a $1 million adjustment to reflect the difference between the GAAP and non-GAAP tax rate, we expect non-GAAP EPS for the fourth quarter to be in the $0.46 to $0.59 range.

Our fourth quarter estimates assume a non-GAAP gross margin of roughly 51%, an operating margin of between 8% and 10%, and 41.4 million diluted shares. Our tax rates for Q4 are approximately 14% for non-GAAP and in the low 20s for GAAP. These estimates are consistent with the full year 2007 outlook we provided on our last call, except for GAAP EPS. Full year GAAP earnings are lower than what we provided during our Q2 call due to increases in the expected amount of restructuring costs and modifications to our tax assumptions.

I would like to note that the full year results reflect approximately $0.12 of EPS reduction for the cost of our engagement with [Bain], as well as the CEO search and transition.

In previous years, we have used this call to provide our initial outlook for the upcoming year. However, as you have just heard, we are in the process of prioritizing, sizing and sequencing our Avid 2020 initiatives, and the result of this work, which will take a number of weeks to complete, will have an impact on our expectations for 2008 performance. In addition, it is important to allow a new CEO to have input into this important and strategic decision-making process. Therefore, we will not be providing preliminary guidance for 2008 on this call, but plan to do so on our Q4 '07 earnings call currently expected to take place on January 31, 2008.

This concludes our remarks. Now we would be happy to take your questions.

(OPERATOR INSTRUCTIONS.)

Steven Frankel with Canaccord Adams.

Good afternoon. I wonder if I might get a little more detail on what's happening on the post side of the business. How well do you think you've penetrated the market with your newest HD products? And do you think that is still a growth business?

One second, Steve.

So, our install base is approximately 30% converted so far. It will take a number of years to reach an 80% conversion level due to the need of customers to spread out their large capital investments. That's about all the detail I have right now during the call. If you'd like, we can -- I can get back to you offline.

And did the run rate business in Post improve quarter-over-quarter? I know you said Government was up, but was any -- what was happening in the traditional Post side?

Well, for the run rate business, it varies from quarter to quarter due to the timing of large deals. However, in Q3 we had a strong showing sequentially in our run rate business. It did grow.

But, was it solely growing because of Government or -- what's happening in the Hollywood side?

Well, it grew more than just the Government. As we said, we put out this quality release. We started it in September on a controlled manner, and then we continued it for the more broader distribution during October. And it's had a very positive effect, and it has -- during the quarter it's been positively perceived, and we have seen an increase in our run rate business because of it.

Okay.

And switching gears to the Consumer side, where are Studio 11 channel inventories relative to your expectations? How are you positioned for the Christmas season?

Well, we believe we're in very good shape for the Christmas season. There was a significant load-in during the summertime, and we believe we're in very good shape for the Christmas season. Hopefully that helps.

Okay.

And are you expecting the PCTV part of the business to be a major contributor in Q4, or do you expect Studio 11 more of what will power Consumer in Q4?

Well, both segments are now number one in their markets, and we're counting on both to perform very strong during the quarter.

Okay.

And then my last question, the weakness in the Pro Tools business, is that a sign of market maturity? And do you expect that market to be like a lot of other tech markets and use a lot less hardware, going forward, being more of a software solution? Or is this just the product cycle kind of running its course, and we have to wait for the next round of upgrades?

Well, the upgrade business has been -- right now we're focused on -- how would I say this -- the upgrade business is understandably slowing down as we've mined a large number of the users from the install base for prior systems. So, it is a natural progression.

The LE side of the business is up. The Pro Tools is not weak, however. The HD and -- the HD upgrades are also up. So, I wouldn't say there's a major shift in that market.

Okay, great. Thank you.

Okay.

From JP Morgan, Paul Coster.

Yes. First question is just sort of big-picture. Obviously, Digital Media is, generally speaking, a growth area. You're not experiencing growth at the moment. How do we reconcile those two, the fact that you're not -- are you losing market share, or is it pricing? How would you depict it?

I wouldn't say we're losing market share. Right now we've been working very hard on a quality release, which we've just gotten out, and we expect that to be very -- that has been very well received, and we expect that to affect our business. (Inaudible) counts are climbing. Pricing, it is competitive, and pricing has been declining there, but we do not believe we're losing market share.

Okay.

The Consumer business looks like it might -- sort of improving, but it doesn't look like it's going to be profitable full-year, nor does it feel like it's going to be next year, the way I'm thinking about it. But, do you agree if it isn't going to be sustainably profitable, is it a business you should be in? And are there synergies as that was part of the rationale for acquiring it, of course?

Why don't I take that one?

You ask an excellent question, and it's one that we're hard at work on understanding a lot better. We think that these -- that this particular kind of product is something that we probably can put to very good use strategically, but we need to do a better job of defining exactly how we're going to do that, and then execute on it. So, not quite at the point where we're ready to answer that question well, but we expect to be there within several months.

Okay.

The strategic review that's underway, it sounds like it's quite nuanced and iterative and so on. Does that mean, though, that it's going to be going on pretty much indefinitely, and that we're going to see restructuring charges coming through every quarter for the next year or so?

I don't think there are any -- I don't think we can tell you that there's any particular pattern that we could predict at this point. I don't think it's actually that nuanced. We are undertaking a pretty large-scale review of our business, and I think that there's just a lot to follow. And at this point, we can't really predict what the effect will be.

Okay.

My last question is you're discontinuing the Media Stream servers on the playout side. We've seen at least one company come into the playout server market and then branch out from there into perhaps more of your production environment. Is there a risk that, by relinquishing this area, that we'll see more of the same?

I would say no. We don't feel that that is a risk for us. We continue to support the Media Stream customers after the product has been discontinued. We will provide Media Stream -- for all Media Stream customers specific service and support provision when we announce the official discontinuation date later part of next year. We work very closely with our partners in this area, and we have a pretty good relationship with them. So, both from a partner side and a customer side, we feel this is the right thing to do, and we don't think we're risking having the partners move into our other businesses.

Great. Thank you very much.

You're welcome.

Mike Olson with Piper Jaffray.

Thanks.

Joel, can you repeat what you said for the non-GAAP tax rate?

Sure. One second.

So, our tax rates for Q4 are approximately 14% for non-GAAP and in the low 20s for GAAP.

Okay, thanks.

And then, I guess when we look at EPS, it was a little bit better, but a big part of that was, at least in our model, was the significant reduction in sales and marketing, and more than what we were expecting. I think sales and marketing was actually the lowest that it's been in seven quarters. Do you expect that to continue to be this low in the coming quarters?

And I guess the last piece would be, while it helps the bottom line, is that reduction in spending potentially going to negatively impact revenue in coming quarters?

So, I do not expect -- we believe very strongly in marketing our products and engaging in marketing efforts, and we do not expect to see a big decline in our spending investment there. So, we will continue to invest and market our products because -- as we have done before. We see no change in our method there.

Okay.

And then, you talked about moving some deals from backlog into revenue because of getting your arms around some of those technical issues. Where are we in that process of figuring out those technical issues? And I guess how far do we have to go to kind of get the majority of those deals figured out from that standpoint?

I'd say we're -- we've been doing a lot of work there. This quality release helped a lot. We are on plan, and our expectation is, by next summertime, we should be through the technical commitment phase of our backlog.

Okay. That's it for me. Thanks.

Okay.

Chris Rowen from Soleil Securities.

Hi. Just following up on an earlier question on the Media Stream server, when Avid bought Pinnacle, Pinnacle brought a playout server, and Avid had its own playout server. Which one is Media Stream? Is that the Pinnacle or the Avid product?

That's the Pinnacle.

Okay. So, are you keeping the Avid product, or have you already -- I thought the Pinnacle product was the more successful on the market than the Avid product.

I would not say that's -- well, first of all, we are not -- we are keeping the Avid product. the Pinnacle product was good, but it was much older architecture.

Okay, so the Airspeed is the Avid product, and you're keeping that?

Yes.

And what percent of your Broadcast overhaul deals over the last year and a half, two years, would you say have included Avid or Avid-Pinnacle playout servers versus a partner playout server?

Oh, about 80%.

80% about? Okay. So, it's not that you're getting out of that business. You're just getting out of that product.

We're getting out of the Transmission Server business. we're going to continue to work in there but, you know, use more third-party products along. But, we're going to focus more on helping the customers with workflows and things like that, and use more of the third-party transmission servers.

Okay. I guess I'm -- so, when you said 80%, 80% of your overhauls were with an Avid playout server or with a third-party playout server?

That's -- 80% was with Avid, not Pinnacle.

Okay. No, my question ...

The Pinnacle is a very specific application.

Okay. No, I'm sorry, I confused the question. Avid versus partners, if you look over the last year and a half, what percent of your Broadcast Overhaul businesses have had Avid playout servers in them versus partner playout servers?

80% was Avid, 20% was partners.

Okay. All right.

And then, the M-Audio business, you said there was some weakness in the software and the interface business, but that the keyboards and the speakers were strong. I guess what's going to give you a sustainable competitive advantage in things like keyboards and speakers, which seem to be more about manufacturing efficiencies than software expertise, like Avid has?

Well, the poor IP in keyboards, plus the interfaces, is our strength.

Okay, thanks a lot.

Okay.

Andrew Abrams with Avian Securities.

Hi, guys. I was wondering if you could talk a little bit about Interplay and what the status is of the modifications that you guys have been working on to try to create an upgrade path for older users and the Interplay users now.

So, I would say we're on plan, as we've mapped out.

Can you give me a little more detail there as far as what the amount of resources that you're using there, and have you gotten to the point where the two systems are basically interchangeable as far as workstations go?

Not yet. They are not interchangeable yet. We're working. We're on plan. Look for sequential improvements over the next six to 10 months to get us to a good spot.

Got you. Okay, thank you.

Needham & Company, Jim Ricchiuti.

Hi, thank you. I joined the call a little bit late, but I was wondering, have you given out any detail in terms of the business by geography? And I'm curious, just in general, how are you progressing in North American, and specifically in the (inaudible)? Thank you.

You broke up a little bit there, but the U.S. is approximately 46% of our business. Domestic business is about 46%, and our international business is about 54%, if you're looking at the breakdown.

And Joel, just in general, how was the business tracking in -- domestically in the -- what I'm curious about is in the Professional Video portion of the business, give us a percentage change in that, how that business, relative to Q2 and relative to Europe?

Well, I can tell you that we're pleased with the results we achieved in Americas in Q3, and we believe the business for the Americas has stabilized. The education market and the video business were strong in Q3, with a sequential increase in new net [seats]. We're down on -- we're up sequentially over Q2 but down year-on-year, if that gives you an indication.

Okay.

And just with respect to the Broadcast market, how would you characterize your customers, the overall tone of business they look out at their business in the early part of '08 with some signs of slowing in the economy?

So, the Broadcast business year-to-date for 2007 represents more than half the revenue from our Video business. It's up modestly from the comparable periods. You've got to understand, the revenue is a bit lumpy, and by that I mean it's when we take revenue, because a lot of the Broadcast business are these larger deals that require acceptance. And so, it's a bit lumpy, and based on the timing of our recognition of large installations.

We experienced a fall-off in this quarter on net new deals, but that was more related to timing, not a loss of business.

Any color you could provide on bookings in the Broadcast business?

No. we do not provide bookings information.

But just in general terms, how were bookings?

It's not something we give out. I'm sorry.

Okay. Thank you.

And it does appear at this time we do not have any further time for questions. I would like to turn it back over to Mr. Ridlon.

Okay. So, like to thank you all for joining us today. Should you have any further questions, all of us will be available for follow-up after today's call. We look forward to speaking to you next quarter. Thank you very much.

Ladies and gentlemen, that does conclude today's presentation. We do thank everyone for your participation, and have a wonderful day.